Discussion Paper (continued)
By William Hogan, Raymond Plank Professor of Global Energy Policy
U.S. states would implement the federal Clean Power Plan using a variety of policies that could either undermine or support the operation of electricity markets.
Carbon budgets have emerged as a robust metric of warming, but their application to climate policy has been limited to global assessments. This Discussion Paper explores the potential of regional carbon budgets to inform climate policy.
This paper calculates, for the top twenty emitting countries, how much pricing of CO2 emissions is in their own national interests due to domestic co-benefits alone. The answer: a significant (though varying) portion of the price that would also include climate benefits.
Uncertainty about "climate sensitivity"—the impact on temperature of increased concentrations of greenhouse gases—grew from the IPCC's 4th to 5th Assessment Reports. The authors conclude that this "bad news" outweighs the "good news": a lower value for the bottom end of the range for temperature rise.
The authors argue that reducing uncertainty about the impacts of climate change will facilitate effective adaptation, even in the absence of effective international climate agreements.
"Internationally-Tradable Permits Can Be Riskier for a Country than an Internally-Imposed Carbon Price"
Uncertainty in the form of country-specific abatement-cost shocks, together with cross-border revenue flows from internationally-tradable permits, can lead to greater country risk from an international emissions-trading system than from the imposition of a uniform carbon price.
The authors examine the effect of real energy prices and a simulated carbon price on production and net imports. They find modest adverse competitiveness effects for energy-intensive industries.
The authors argue that the climate change global commons problem will be solved only through coherent carbon pricing. They discuss a roadmap for negotiating a uniform carbon price across countries, for verification of emissions reduction, and for a governance process to which countries would commit.
The authors explore several approaches to an ambitious climate agreement in Paris in late 2015—including through carbon pricing.
By Joseph E. Aldy, Faculty Affiliate, Harvard Project on Climate Agreements
Inadequate policy surveillance has undermined the effectiveness of multilateral climate agreements. To illustrate an alternative approach to transparency, the author evaluated policy surveillance under the 2009 G-20 fossil fuel subsidies agreement. The Leaders of the Group of 20 nations tasked their energy and finance ministers to identify and phase-out fossil fuel subsidies. The G-20 leaders agreed to submit their subsidy reform strategies to peer review and to independent expert review conducted by international organizations.